Glassnode Warns as Bitcoin Rally Continues: Spot Volume Plunges 64%
Despite recent upward movements in Bitcoin’s price, Glassnode data indicates that fundamentals remain weak due to low spot volume, insufficient demand, and general market apathy.
Although the cryptocurrency market leader Bitcoin has recently excited investors by climbing above the $65,000 level, on-chain data whispers the need for caution. While inflows into Spot Bitcoin ETFs turning positive paints a promising picture, analysts state that the market is still standing on “shaky ground.” It is emphasized that participation and demand must be much stronger for a sustainable recovery.
The most notable weakness in the market is seen in spot trading volumes. The daily spot turnover rate has fallen to 0.32%, the lowest level in the data’s history. Volume in dollar terms has decreased by 64% compared to last year. Analysts describe this situation as “textbook apathy.” The shrinking trading volumes in both crypto exchanges and exchange-traded funds prove that there is no participation accompanying the price increase.
ETF Inflows Fail to Offset Miner Selling
A positive flow of 8,500 (BTC) occurred in Spot Bitcoin ETFs over the last 30 days. However, considering the 13,300 (BTC) produced by miners during the same period, it is evident that this demand is not enough to fully absorb the new supply. Analysts argue that for a healthy uptrend, ETF inflows must at least fully cover the amount of newly minted Bitcoin.
Risk Signals in the Futures and Options Market
In the futures market, the 3-month basis rate rose above the US 2-year Treasury yield, ending a record-long negative period. However, for the carry trade (borrowing from a low-interest asset to invest in a high-yield asset) strategy to become attractive again, this spread needs to reach approximately 300 basis points. Until this level is reached, it is predicted that institutional capital’s appetite may remain limited.
On the other hand, in the options market, investors still prefer hedging against downside risks rather than focusing on upside gains. The fact that the one-month 25-delta skew data has remained in positive territory for nearly a year indicates that the market is paying a higher premium against the possibility of a decline. While current volatility levels are at multi-year lows, the approach of this skew toward zero could signal a true recovery.